An Introduction to the U.S. Trade Remedies Laws

For U.S. manufacturers who have been harmed by competition with low priced imports, the U.S. trade remedies laws can provide meaningful relief. This article will provide an introduction to two specific trade remedy laws – those concerning (1) antidumping investigations; and (2) countervailing duty investigations.

Under the antidumping (AD) statute, members of a particular domestic industry may petition the U.S. government to investigate imports of similar foreign goods and to impose compensating duties where two threshold requirements are met: 1) the imports are sold in the United States at less than fair value; and 2) the low-priced imports are a cause of (or threaten) material injury to the domestic industry. In a countervailing duty (CVD) investigation, the U.S. government must determine: 1) whether imports are being subsidized by the government of the exporting country; and 2) whether the subsidized imports are a cause of (or threaten) material injury to the domestic injury.

Generally, AD and CVD investigations are conducted together on parallel tracks before both the U.S. International Trade Commission (“ITC” or “Commission”) and the Department of Commerce (“Commerce” or “Department”). The ITC – an independent, quasi-judicial, federal agency – determines whether a domestic industry is materially injured by the dumped or subsidized imports. In an AD case, the Department ascertains whether the imported products are being sold at less than fair value – or “dumped” – into the U.S. market and calculates the appropriate duty. In a CVD case, the Department is responsible for determining the nature and extent of the government subsidies. The extent of the subsidy then determines the amount of the countervailing duty assessed on the imported merchandise.

Adopted as part of the Tariff Act of 1930, the U.S. antidumping statute is a remedial measure that authorizes the imposition of compensating duties for an initial period of 5 years and which can be renewed for subsequent 5-year periods. The dumping duty is based on the difference between the “normal value” of the product and the price charged for it in the United States. Following a preliminary investigation that results in positive determinations from both the ITC and the Department, a dumping duty deposit is immediately imposed on all imports of the subject products. Similarly, the countervailing duty statute authorizes the imposition of compensating duties to “countervail” subsidies paid by foreign governments to their country’s exporters. Consequently, the Department calculates the countervailing duty by determining and offsetting the amount of the subsidy. Just as with a dumping duty, a countervailing duty is immediately imposed on all imports of the suspect products following positive preliminary determinations from the ITC and the Department.

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For more information regarding the U.S. antidumping and countervailing duty laws, please do not hesitate to contact Daniel B. Pickard, a partner in the International Trade practice of Wiley Rein LLP, in Washington DC. He can be reached at 202.719.7285 or via email at dpickard@wileyrein.com.